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China Politburo Pledges Moderately Loose Policy with Assistance for Property Market
December 10, 2024
China’s top leaders signaled stronger economic support for 2025, with the Politburo pledging a “moderately loose” monetary policy, signaling potential rate cuts. The shift from a “prudent” approach, held since 2011, is said to suggest increased efforts to combat economic challenges. The Politburo promised a “more proactive” fiscal policy, hinting at a wider fiscal deficit to accommodate more government borrowing. Policymakers also pledged to stabilize the stock market and property sector, and raised expectations for stimulus programs. It emphasized using all means to boost consumption as a top priority, potentially shifting the focus to domestic demand as the main driver of growth for 2025. These measures come on the back of China’s economic difficulties, such as a deflationary signals and a struggling property sector. The meeting set the stage for the upcoming Central Economic Work Conference, where further policy details are expected.
Dollar bonds of several property developers have rallied. Vanke’s notes rallied over 2 points, Road King’s notes rose over 1 point and NWD’s notes were higher by 1.8-2 points across the curve.
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